State v. Town of Columbia

• Decision Date: 02 July 1892
• Citation: 111 Mo. 365,20 S.W. 90
• Parties: STATE ex rel. ROBINSON, Prosecuting Attorney, v. TOWN OF COLUMBIA et al.
• Court: Missouri Supreme Court

20 S.W. 90

111 Mo. 365

STATE ex rel. ROBINSON, Prosecuting Attorney, v. TOWN OF COLUMBIA et al.

Supreme Court of Missouri, Division No. 1.

July 2, 1892.

MUNICIPAL CORPORATIONS — BONDS — LIMITATION OF INDEBTEDNESS.

Const. art. 10, § 11, provides, inter alia, that in cities and towns having less than 10,000 and more than 1,000 inhabitants the annual rate of taxation shall not exceed 50 cents on $100, but that in counties, cities, and school districts the specified rates may be increased by a two-thirds vote for the purpose of erecting public buildings. Section 12 provides that "no county, city, or town * * * shall be allowed to become indebted in any manner or for any purpose to an amount exceeding in any year the income and revenue provided for such year, without the assent of two thirds of the voters," etc. Held, that a town of less than 10,000 and more than 1,000 inhabitants could not by a two-thirds vote issue bonds and levy a tax exceeding 50 cents on $100, for the purpose of constructing waterworks and an electric light plant.

Appeal from circuit court, Audrain county; E. M. HUGHES, Judge.

Suit by the state on the relation of J. De W. Robinson, as prosecuting attorney of Boone county, against the town of Columbia and others to enjoin the issuance and sale of certain bonds. Judgment for plaintiff. Defendants appeal. Affirmed.

Alexander Martin, Lewis M. Switzler, and C. B. Sebastian, for appellant. J. De Witt Robinson, Odin Guitar, Squire Turner, and Wellington Gordon, for respondent.

BLACK, J.

This is a suit in the name of the state at the relation of the prosecuting attorney of Boone county against the town of Columbia and the trustees thereof to enjoin the issuing and sale of certain bonds. The suit was commenced in the Boone county circuit court on the 3d January, 1891. The Audrain circuit court, to which the cause was transferred by change of venue, granted a perpetual injunction as prayed for, and the case is here on the defendants' appeal.

Columbia is a municipal corporation governed by the general law relating to towns and villages. On the 23d October, 1890, the trustees passed an ordinance, the first section of which is as follows: "Section 1. Whereas, it is provided by the constitution of the state of Missouri that the annual tax rate on property in towns having less than ten thousand and more than one thousand inhabitants shall not exceed fifty cents on the one hundred dollars' valuation on taxable property in said towns; that no municipal corporation shall be allowed to become indebted in any manner or for any purpose to an amount exceeding in any year the income and revenue provided for such year, without the assent of two thirds of the voters thereof voting at an election to be held for that purpose, the town of Columbia coming within the purview of the above provisions; and whereas, it is proposed by the board of trustees of said town, on behalf of the inhabitants thereof, to bind said town to an increase of the indebtedness of said town in excess of the annual income and revenue thereof, and above the constitutional limit of taxation thereon, said increase of indebtedness not to exceed the sum of forty-five thousand dollars, said amount, or so much thereof as said board shall deem necessary, to be expended in the purchase, location, and establishment of a combined water-works and electric-light plant, to be owned and operated by said town, and in the purchase or lease of necessary grounds therefor, for the purpose of supplying the said town with water, and the streets and thoroughfares thereof with lighting by electricity: Now, therefore, with a view to test the sense of the legal voters of said town of Columbia on the increase of indebtedness as aforesaid for the objects and purposes hereinbefore specified, a special election is hereby ordered to be held at the courthouse in said town on Tuesday, November 18, 1890, for said purpose." The proposition was approved by more than two thirds of the voters. On the 9th December, 1890, the trustees adopted another ordinance, whereby they directed bonds to be issued to the amount of $45,000, due in 20 years, and bearing interest at the rate of 5 per cent. per annum, payable semiannually. This ordinance provides for an annual tax equal to one-twentieth part of the principal, to create a sinking fund, and for a further annual tax sufficient to pay the accruing interest. The town has a population of more than 1,000 and less than 10,000 inhabitants. The value of the taxable property was $1,264,286 on the 1st June, 1890, as shown by the county assessor's books, made out for the year 1891. For five years an annual tax of 50 cents on the $100 valuation has been levied and collected to defray the current expenses. An additional annual tax of at least 37½ cents on the $100 will be required to meet these bonds if issued under the before mentioned ordinances.

It is earnestly insisted on the part of the plaintiff that the powers given by the statute to a town "to borrow money for the improvement of such town, or to supply the same with water or gas," and "to provide for lighting the streets and erecting lamps thereon," do not include the right to furnish the inhabitants with water and light for domestic use. There is nothing in the ordinance to show that the town proposes to sell electricity to the inhabitants. It is, however, doubtless the intention to furnish water to the inhabitants for domestic use. For all the purposes of this case it will be assumed that the town has the power to build and own waterworks, and to furnish the inhabitants with water, and that it has the power to own and operate a plant for the purpose of lighting the streets and other public places with electricity. Behind all this is the far more important question whether the town can incur the indebtedness of $45,000 to be paid by a tax over and above the 50 cents on the $100 valuation, for that is what the trustees propose to do. Section 1947, Rev. St. 1889, provides that towns and villages may contract debts in excess of the annual income and revenue for any year for any purpose authorized by the charter of such town or any general law upon the assent of two thirds of the legal voters voting at an election held for that purpose, provided, such indebtedness so to be contracted shall not, with the existing indebtedness, exceed in the aggregate 5 per centum of the value of the taxable property therein. Under this statute Columbia would have a right to create an indebtedness to the aggregate amount of 5 per cent. of the taxable property therein. It is conceded that the indebtedness, including the proposed bonds, does not quite reach the limit. The town,...